Walmart (WMT  ) shares were trading 3% lower despite the company issuing strong Q3 results that topped analysts' estimates on the top and bottom-line. The company also raised its full-year outlook and has managed to continue growing despite facing tough year-over-year comps. It attributed the strong results due to more shoppers going to its stores to deal with rising costs.

Its strong earnings results also dispelled concerns that supply chain issues would lead to reduced inventory which had caused some retailers to fall short on revenue targets. Walmart has taken extraordinary measures to navigate the crisis and ensure that its e-commerce orders are fulfilled and physical stores are stocked by chartering their own ships, increasing inventory, and investing in its own logistics network.

Inside the Numbers

In Q3, Walmart reported $1.45 per share in adjusted earnings, topping expectations of $1.40 per share. This was about a 23% decline from last year. Revenue also beat at $140.5 billion vs expectations of $135.6 billion which was a 4% increase from last year. Same-stores sales were higher by 9.2%, while e-commerce sales increased by 8%, a sharp deceleration from 87% growth last year.

The company also raised its forecast for the year, now expecting EPS of $6.40, above its previous range between $6.20 and $6.35. It also expressed optimism that shelves will be fully stocked during the holiday season. In part, it's because of higher than average levels of inventory and ordering seasonal items early. For these reasons, the company is expecting a strong and record Q4, fueled by a strong holiday shopping season.

Walmart, due to being one of the best places for 'low prices', has been benefiting from inflation and consumers becoming more cost-conscious. Therefore, more people are buying groceries, clothes, and other items at the store. The company said that food inflation was in the low to mid single digits over the last quarter and is feeling pressure from rising fuel, shipping, and product costs. So far, it hasn't noticed that customers are trading down in terms of size or lesser brands.

Overall, Walmart continues to benefit from the overall growth in retail spending in the U.S. Its grocery business continues to take market share, while its online business retains considerable potential albeit with slowing growth.